The igaming industry in Germany is floundering. The suspension of licensing for online gambling regulations by the German Wiesbaden Administrative Court in Hessen means the prospects of betting regulation have hit another major snag. The 11th hour suspension comes as a result of protests from operators who felt that the licensing process was rigged.
Protests lead to court suspension
The Hessen Ministry of Interior and Sport had decided to issue twenty new licenses on September 3rd, 2014, and the successful applicants included leading casino names like Bet-at-home, Bwin, Digibet, Ladbrokes and Betfair. However, the process of application for licensing and the choice of the successful applicants left many operators who were denied licenses fuming. So much so that a group of them – made up of domestic operators like Bet365, Lottomatica, Tipico and BetVictor – decided to appeal to the Wiesbaden Administrative Court and have the licenses revoked, which is exactly what the court did. It may come as a victory for the plaintiffs, but the court’s decision has effectively taken online gambling in Germany off the table for some time. As the representative for MyBet Holding – one of the successful twenty – said, “it is not foreseeable…when exactly the licenses will now be issued.”
The protests against the not-so-transparent licensing process have put the igaming industry in the country on the back foot for now. The Wiesbaden Court’s interim order for suspension of licensing does not reveal when the process will be renewed again but sources are claiming that it can take anywhere from 12 months or longer.
Turbulent times ahead
For a country that boasts of having 10% of all world-wide online gamblers, this is indeed sad news. The annual turnover of the igaming industry in Germany is estimated to increase to EUR 1.8 billion by 2015. In just three years since liberalization – online gambling was prohibited in Germany until the end of 2011- the market has become a huge money churner for the European igaming industry. For the period from 2008-2011, the sixteen states had a treaty that prohibited all kinds of gambling which was lifted only after a European Court of Justice ruling in 2010 that deemed the treaty unlawful and non-compliant with the EU fundamental freedoms. A new interstate treaty was created, which came into effect on 1 July 2012, and which gave private companies the right to apply for licenses to offer and broker sports betting as well as lotteries. A license can also be obtained for advertising the services online.
Germany has been notoriously anti-gambling for a long time now. The Gambling Act passed in the state of Schleswig-Holstein, which gave private operators freedom to provide a broader range of services like online casinos and virtual poker, is being turned back by the new socialist administration that took over the reins in July,2012. Many organizations like the European Commission and the German Monopolies Commission have consistently decried the current treaty for its violation of EU rules, but to no avail. The gaming industry is surely facing some tough times in the country, and the Wiesbaden ruling is not going to make it any easier.